Summary
Millennials and Gen Zs know retirement is very sensible, very necessary, and very considerate. Saving early and often, taking control of your financial future, and centering flexibility take center stage for these generations. Join us in learning how they prioritize retiring on their terms.
A 2023 Pew study found that inadequate retirement savings will significantly affect every state and the federal government over the next 20 years. With 56% of Americans feeling behind on saving for retirement, it’s clear that early and consistent savings are crucial.
Younger generations are mastering impressive financial habits, like early adoption of financial technology, having open and honest conversations about money, and diversifying income streams. Yet, for many, the idea of retirement still feels out of reach.
With pensions shrinking, the economy feeling unstable, and an unpredictable cost of living, people are starting to feel like they should enjoy life now. Things like buying a house or having kids – things that used to seem possible – are starting to feel out of reach, so people are focusing on making the most of today.
So, how do we make retirement relevant to these real concerns? Let’s explore four ways Gen Z and Millennials reframe retirement to align with their values and priorities.
Flexibility Over Tradition
For Millennials and Gen Z, rigid structures feel outdated. Retirement no longer has to mean working until 67 since much of their lives already fundamentally break with the status quo of previous generations. Conversations among these generations center around achieving a sustainable financial future more than the concept of retirement.
Semi-retirement, through options like part-time or freelance work, can offer the freedom to sustain yourself while still enjoying life. Younger generations focus on maintaining control, not sacrificing today’s balance for tomorrow.
Intergenerational conversations inspire everyone at the table to re-imagine what they see as their financial future. These conversations give each other a taste of what it’s like to be you in your generation and humanize each other’s financial journey. No future is limited – and there is much to learn from both flexibility and tradition.
Plan Beyond Social Security
NASDAQ highlights that Gen Z is already aware that Social Security won’t be enough to retire comfortably and could even be insolvent by the time they retire. This isn’t only a concern for their generation, rather it’s a concern that unites them with Millennials and Gen X.
Data from the U.S. Federal Reserve shows an unrivaled trend from households headed by twenty-year-olds which is not seen in other generations. Young people have caught the Roth IRA bug – tripling from 2016 to 2022, 6.6% to 19.2% – and it’s sticking.
Prioritizing retirement accounts like a 401(k) or Roth IRA are some of the strongest replacements for what used to be a certain safety net. Small, consistent contributions made early can grow significantly, providing a sense of financial security.
Shape Retirement Around Your Life Goals
Instead of seeing retirement as an “end,” it’s best to think of it as a part of an overall life vision. Whether your dream includes travel, starting a passion project, or pursuing education, saving now allows you to pursue these goals freely later on.
One strategy that many find helpful in reimagining retirement is the FIRE method—building substantial savings to achieve financial independence early. Even if you don’t retire decades early, financial independence offers the flexibility to choose how and when you work.
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Retirement doesn’t have to follow a one-size-fits-all plan. By focusing on flexibility, early saving, and aligning your financial goals with your unique life vision, you can build a retirement that suits you—not just the traditional system. And that goes for any age! #BankWhereYouWantToBe
